Mr. Speaker, I do not know all the facts but my understanding is that there was nothing wrong with that at all. It was fully disclosed to the public. The public knows exactly what Mr. Rae borrowed. He knows exactly what the terms were, who he borrowed it from and that, under the existing legislation, it has to be paid back within a certain period of time in accordance with the legislation that does exist.

There is something that I would really like to know. Back in 2002, the present Prime Minister went through a leadership campaign where he received millions and millions of dollars from companies, organizations, associations and people across Canada but he will not disclose who gave him the money. The public has been left to wonder who financed him, what the people received in return, what he demanded in return, and what access these people have.

We need to get to the bottom of that and to root it out so the public knows, or even right now, root it out and disclose it. My answer to the member is that tomorrow he should sit down beside the present Prime Minister and tell him to disclose the names of the people who financed his leadership campaign.

The Prime Minister still has not revealed his loans and then the other members say that Mr. Rae has not paid off his loans and so on. The only people to blame for this entire idiotic exercise are the people who are in this chamber and who were in this chamber in the previous Parliament as well.

We have eliminated the ability to raise money from corporations and unions. We have severely circumscribed the ability to raise money from individuals. As the member for Etobicoke—Lakeshore rightly pointed out, people get into a leadership race and they need the money immediately in order to run in a short period time. Naturally they get a loan of some kind or another, which creates a whole great panoply of other contradictions.

Would the hon. member entertain the notion that it is time to end this nonsense and simply have the entire functions of leadership candidacy funded by Elections Canada?

Mr. Speaker, I am not convinced that I would agree with the premise of that. I do not think the public would want to be funding all aspects of leadership campaigns. I believe there should be perhaps further limits on spending.

I would disagree with that question. I think there is a rationale for spending limits and financing and loans in accordance with legislation that is transparent.

Mr. Speaker, I have been following this debate and am very pleased to make a few comments with respect to Bill C-29 and try to make it understandable for the viewers watching the proceedings.

To do that, I would like to sum up from my perspective how I view the whole issue with respect to accountability in election financing.

The public knows that as it stands right now there are huge restrictions with respect to how a candidate can raise the funds necessary to run an election. The public should be aware that under the Election Expenses Act there is a cap on how much can be spent in an election. There is a very clear and very transparent reporting process that the chief financial officer has to go through.

In fact, in my riding, my chief financial officer, who is a layperson, a long-time dedicated person in the riding and not an accountant, has said that the reporting procedures are becoming so exhaustive that one almost has to be an accountant. That is the degree of scrutiny that this is given. My reply to it is that we have to work around that issue because it is in the public interest to be totally transparent.

We are also aware that under the former regime unions and corporations had a cap on what they could contribute. In the regime that is now being entrenched in this bill, unions and corporations cannot make contributions. Also, there is a very clear stipulation that the cap on personal donations is $1,100.

I review those things because I always thought that public life and public service was one of the highest honours that an individual could be involved in and that could be granted to an individual. Therefore, anything that deals with the mechanics of taking out loans or whatever should be so clear and so transparent, but accessible and easy to do, and it should not be a disincentive for individuals to come forward and want to be part of one of the greatest traditions, which is the democratic tradition of seeking office, be it municipal, provincial or federal, or at the school board level or in other elected office.

I come from a very working class riding. When I reflect on my nearly 30 years of elected public office and reflect on the nature of support that I have been given, I can say that it has come from the people of our riding. At no time can I remember huge donations and so on.

However, I welcome a transparent regime. Having said that, I might say that this bill is transparent, that this is putting caps on amounts, tightening up and so on, but it gives me some concern. It gives the appearance that we are all equal and that we all have access to a bank and perhaps access to guarantors who have the means to do that. It gives the appearance that there is equity where in fact there is not. We know there is not.

When one wants to put on a cap of $1,100, how many members have constituents who can avail themselves of the cap? The reality is usually $100, $50 or $25. The reality is little fundraisers that raise perhaps $2,000 or $3,000 at the most, but often they raise $400 or $500. That is the reality. That reality is reported in the existing legislation.

Also, if an association takes out a loan, it or the party is going to be held liable, but it is the association in the first instance. It will be held liable. I would ask members about this. In their associations, how many people have the capacity to want to be liable if, let us say, a loan that is taken out is not repaid? It could happen for whatever reason, such as death. It could happen for a number of reasons.

If we are elected, we are accountable, because someone is going to come over and say to us, listen, that loan has not been paid back and that seat will be lost. That is a consequence. That sure would plug the gap that might exist if we were worried that candidates would not pay back the loan.

Mark you, Mr. Speaker, I am saying that it is very clear that one has to report it, so the issue is on consequence. If one did not get elected but still had exceeded and had not paid the loan, one's association is liable for it.

We know that the banks are going to come back for it. In this regime being put forward here, the banks are a lending institution at whatever the interest rate is. In my experience, I have had the opportunity to raise money from people and report it, people who have had confidence in me, as all my colleagues have experienced.

It seems to me that this legislation is wrong-headed in the sense that it looks as if we are all trying to circumvent the law. That was the characterization that was made, albeit in a different context: that we are trying to circumvent the reporting process. We are not. There is an exhaustive reporting process and yet we are coming forward and saying this because the consequences have not been implemented as clearly as they should be by the Chief Electoral Officer and a case was cited.

What is at fault is that the consequences should be laid out in a clearer way if we are not satisfied with the adjudication that took place, but that is not what is being done. What is being done is a whole new regime that looks like it treats us all fairly and equitably, but ignores the reality that right across this country, from coast to coast to coast, there are communities of very fragile and limited means. Yet the associations are going to be held liable if anything should go wrong.

It is almost a washing of hands with a bureaucratic mechanism. It is not intentional, but the end result will be the same. It will be a disincentive for people who want to be part of the process of being on an association, I would think, and I am saying this from the experience that I have had with the kinds of social and economic backgrounds of the people, God bless them, who sit on the executive of my association. I am sure that is the case in many of the constituencies.

There have been amendments made that I think are excellent. I will be supporting the bill, but I have to say that I think it places a cloud on this because there have been consequences that were disproportionate to what occurred with respect to the reporting, but the reporting is very comprehensive.

If there is any fault, it is that we just did not put down what the consequences would be if there were a deliberate circumventing of the law. What we have here, I think, is just overly bureaucratic and will not encourage people to be part of the democratic process in standing for candidacy or being part of local associations.

Colin CarrieConservativeParliamentary Secretary to the Minister of Industry

Mr. Speaker, I listened intently to what the member had to say. I know that he is an honourable member, as many of the members of the House are. They would never think of doing anything to circumvent the law, but we saw an example this week with a Liberal fundraiser right here in Ottawa. It was advertised that corporations could go there and bid. The sky was the limit. Basically, they were caught beforehand.

I know that if there is a loophole some people and associations will try to get around it. It is not the intention of this law to put everybody in the same boat or to say that everybody will not respect the law. We are just trying to tighten things up. The real question in this is the accountability of loans. That is what we are talking about today.

We realize as candidates that occasionally we are going to need a loan, but what this bill intends is that we go to a bank or a legitimate lending institution, or we go to a wealthy friend who can give us that money as a loan. There may be members out there whose loans have not been paid back. It is not clear. We are trying to clarify things so the Canadian people can trust their politicians and trust their system.

I am asking the member if he is in favour of that. Is he in favour of allowing a level playing field? Is he in favour of allowing a level playing field for people who are not wealthy or do not have wealthy friends? They will have to go to the bank. Everybody will have to go to the bank. It is going to have to be documented, with interest paid, and people are going to know that those loans have been paid back. Is he in favour of that?

Mr. Speaker, I am absolutely in favour of a level playing field, but I thought that what I had addressed was the point that I do not think it is a level playing field with respect to the ability to take out loans in the manner that has been presented in this legislation.

I think the emphasis should be on the reporting and the consequences if loans are not paid back. If there is a transparency with respect to who has loaned the money and the terms within which that must be paid back, why does it matter where it comes from if it is reported and on the record?

If that were the approach, with the emphasis on that, then I would think that through a consequential approach we would have a level playing field. I may be wrong, but at the end of the day I think that this is going to be a disincentive because it is not a level playing field for that very reason.

I believe that people should have the capacity to support the democratic process, and not with anything in mind that there would be some advantage sought from it. When they loan, if it is on the public record and it has to be paid back, why should it matter whether they are going to support a Conservative candidate, a Liberal candidate, the NDP or the Bloc?

The fact is that everyone knows and it is on the record that the money has been taken out, there is a cap on it and it has to be paid back. That is what the public wants to know.

Mr. Speaker, certainly the hon. member has had many years in politics. He is well aware of the difficulty of fundraising to begin with and especially now with the rules that all parliamentarians are working under.

When it comes to the whole issue of loans, does the hon. member have a concern about just who would run for leadership, no matter what party? With the kinds of rules we have, people cannot put in their own personal money either so it becomes very difficult to raise the money.

Would he have any further comments on whether this is going to discourage people who want to get involved in political life?

Mr. Speaker, I did not address the issue around leadership, but on the last statement with respect to encouraging people to come into public life, I think the bureaucratic regime in the bill is going to make it more difficult for people and provide less of an incentive to actively get involved in public life. I do not think that is intended by the legislation, but I think that is what is going to happen.

Recognizing that urgent steps are needed to begin restoring Kenyans' faith and confidence in Kenya's democratic institutions as impartial guarantors of personal security, human rights and good governance;

Members of this House urge the government of Canada to:

Condemn the tragic loss of life and humanitarian crisis in Kenya following their December 27, 2007 election;

Support ongoing efforts by former UN Secretary-General Kofi Annan to work with relevant authorities and stakeholders to restore peace to the Republic of Kenya based on human rights and rule of law;

Work in concert with the international community using all diplomatic means to persuade relevant political actors and stakeholders to commit to a peaceful resolution to the current crisis;

Review current Canadian aid programs to Kenya in order to propose initiatives to enhance and facilitate Kenya's stabilization, reconciliation and development.

That, in the opinion of the House, the government should implement a policy, which is consistent with North American Free Trade Agreement and World Trade Organization policies and guidelines, to mandate Canadian content levels for public transportation projects, and to ensure that public funds are used to provide the best value to Canadians by supporting domestic supplier and labour markets.

This discussion has been a long time coming. In fact, this is the first time since the founding of this country in 1867 that domestic content levels have been discussed by the House of Commons. Clearly the conversation is long overdue.

I want to make it clear from the start that the intent of this motion is not to debate the specifics of what Canadian content levels, policies, percentages or processes should be. The wording of the motion is intentionally broad to allow for a discussion of the principle of domestic content regulations.

I hope that all parties can agree that we must do more to ensure that Canadian tax dollars are supporting Canadian manufacturers, suppliers and workers. Let us start by looking at the situation as it stands today.

Canada does not currently have any domestic content level requirements for publicly funded transportation projects. As a result, millions of taxpayers' dollars are being used to support manufacturing and to create jobs and economic growth in other countries.

For example, with the coming of the 2010 Olympics, the province of British Columbia is making a significant investment in infrastructure. As part of that process an improved rail system between downtown Vancouver and the Vancouver International Airport is under construction. It is called the Canada Line, and rightly so because the Government of Canada is providing $419 million for this $1.9 billion project. However, the railcar portion of approximately $68 million was tendered without any requirements for domestic content. It is now being built in South Korea.

In another example, York Region's Viva rapid transit system announced the expansion of its fleet in 2006 to help with increased ridership. The purchase of five new 60-foot articulated buses was awarded to Belgian bus manufacturer Van Hool. The price tag was nearly $3.9 million. Once again, the project was partially funded by federal tax dollars without any Canadian content requirement. Because of a lack of domestic content requirements, these are just two examples that resulted in nearly $72 million being spent to support workers in other countries.

In a very real sense, Canadian taxpayers paid twice: the first time with the contribution of federal tax dollars toward these projects; the second time because of the lost employment opportunities in Canada and the very real possibility that some Canadian workers were laid off or even let go permanently because of a shortage of work right here at home.

The real tragedy is that Canada is one of the only major trading countries in the world that does not have domestic content requirements for public transportation projects. This means that Canadian manufacturers and workers are placed at a significant disadvantage in the amount of work that is available from other countries. It also deprives us of an opportunity to attract investments into Canada, and hence of developing a globally competitive industrial cluster based right here. Let us look at some of the rules in some of our major trading partner countries.

In the United States the buy America act requires that 60% of the value of a public transportation project must come from within the United States. This percentage applies to all supplies and raw materials that are used in the contract. In addition, the United States requires that 100% of final assembly be done within the United States of America.

How has this legislation impacted Canadian manufacturers? In order for Canadian transit manufacturing companies to even bid on a U.S. project, they must have an assembly plant in the United States and locate U.S. based suppliers of the materials they need.

In fact, a Canadian manufacturing cluster of sorts has developed in the Plattsburgh region of New York State. Bombardier Transportation; CEIT, an equipment manufacturer; Multina, a maker of seats and interiors; PCS Technologies, a maker of communications systems; Railtech Composites, a supplier of interior devices and components; and Wadbec, a maker of brakes, air conditioning and electronic equipment have each set up operations in Plattsburgh in order to qualify for U.S. contracts. Clearly the U.S. model is an excellent example of precisely how domestic content policies help to grow a national economy.

Our other NAFTA partner has also implemented domestic content rules. In Mexico a 10% price differential benefit is given to companies that use local content of 50% or more.

Around the world we see more of the same. Domestic content levels are also enforced in China where 70% local content is required.

The 27 member countries of the European Union have very stringent rules about EU content requirements. Member countries must reject bids from companies that are not located in any EU member country or in a country with which the EU has a reciprocity agreement. In addition, a minimum of 50% of the product's value must be manufactured within the European Union.

The most severe rules are in Japan, which closes its market to any foreign country so that only Kawasaki has access to these projects.

All markets to which Canadian producers need access demand that they invest there before they sell, but in Canada, we place no such obligation on foreign producers. Indeed, if the situation does not change soon, Canadian producers may be obliged by economies of scale to supply into Canada from other jurisdictions.

As we can see, Canadian companies are at a significant disadvantage because of the lack of Canadian content requirements.

Now that I have outlined the rules of our major trading partners and how they preclude Canadian production and employment, I will take a few minutes to explain what the economic benefits of implementing domestic content levels on Canadian public transit projects would be.

As noted by the Canadian Manufacturers and Exporters in the recently released paper entitled, “Renewing Canada's Infrastructure: An Opportunity to Invest in our Future”:

The indirect, economic contribution of manufacturing and exporting companies to the Canadian economy is significant. It has been estimated that every dollar of value added by manufacturers results in $3.05 of economic activity in Canada -- the most significant multiplying factor of any Canadian economic sector.

In addition, we must consider that approximately 29% of the contract value of public transportation projects is spent directly on wages, salaries and taxable benefits, plus an additional 15% of the contract value is returned to federal and provincial governments as personal income tax revenues.

That translates into $440,000 on every $1 million of investment going back into our economy. This does not even calculate the spinoff effect of those payroll dollars to local merchants and service providers. These numbers make it very clear how we could use our tax dollars to generate employment and economic activity for Canadians. Why would we want to give this economic stimulus away?

Alternatively we can continue to send millions of these dollars to other countries, thereby allowing them to receive the benefit of employment, economic activity and tax revenue generation for their citizens.

It is not a matter of giving favours to manufacturers who are already here. Instead, it is an issue of whether or not we can emulate other countries and leverage on investments to attract global competitors to invest in the Canadian economy.

We want to use our policies to bring more bus and rail manufacturers to Canada. The right answer is abundantly clear. Canada must implement domestic content requirements.

This concept has earned substantial support across the country. The Canadian Manufacturers and Exporters, Canada's largest industry and trade association, is calling for just such a policy to support our manufacturing sector.

In 2006 the Ontario Chamber of Commerce, representing over 57,000 businesses through 160 local chambers of commerce and boards of trade, passed a resolution calling for domestic content levels.

My office has collected literally thousands of signatures in support of the motion. In addition, I receive letters of support from all across the country. William Cherry, president of Talfourd-Jones Inc. in Toronto writes:

The House endorsing this motion would send a clear signal to the government on the need to implement a Canadian content policy...as the only Bus Bumper manufacturer in Canada...you can imagine how we feel about buses being sold to Canadian transit fleets...carrying American made Bumpers paid for by Canadian tax dollars.

Jean-Pierre Baracat, vice-president of Business Development of Nova Bus in Saint-Eustache, Quebec, emailed us:

We, at Nova Bus, truly welcome your initiative and fully support this motion. To further substantiate your case, you should know that in order to be able to sell to U.S. municipalities, Nova Bus will be opening a new plant in New York state in 2009.

There are many other reasons for supporting domestic content levels as outlined by the Canadian Manufacturers and Exporters in the previously mentioned report. Some of these are as follows:

These measures reinforce the supply chains of national companies, especially small and medium-sized businesses in two ways. When governments require that a certain percentage of a given finished product's components be made domestically, it facilitates the entry of locally-based small and medium-sized manufacturers into the supply chains of major suppliers in charge of the project...The measures favour the attraction and retention of private investment...and...These measures help reach a high level of transparency in governmental tendering processes, while ensuring competition that is based on fair rules for the various vendors.

One concern that has been raised about this motion is whether NAFTA and WTO treaties allow such a policy. I make it abundantly clear that both NAFTA and WTO treaties do allow domestic content policies for transportation projects that support the national economy.

NAFTA chapter 10 reads:

1. This Chapter does not apply to procurements in respect of:

(b) urban rail and urban transportation equipment, systems, components and materials incorporated therein as well as all project related materials of iron or steel;

The World Trade Organization's agreement on public procurement reads:

1. Notwithstanding anything in these Annexes, the Agreement does not apply to procurements in respect of:

(b) urban rail and urban transportation equipment, systems, components and materials incorporated therein as well as all project related materials of iron or steel;

Let us remember that. As I have outlined previously, all other G-7 countries, all 27 European Union member countries and China already benefit from domestic content policies. It is time for Canada to stop being a doormat among our trading partners. We must stand up for our own best interest and the betterment of our citizens.

I ask fellow members of the House to support Motion No. 183 and in so doing, support the people of Canada on whose behalf we stand in these hallowed halls. Canadian taxes should support Canadian jobs and each of us has the power to ensure they do.

Mr. Speaker, I listened with interest to the member's speech and I think the goals of his motion are certainly laudable. I have two questions.

First, does he have any idea as to how municipalities would feel about the federal government putting a restriction on their purchasing?

Second, do we have the capacity in terms of the manufacturing in Canada to ensure we would not slow down some of the municipal projects that may be going forward if we were to implement a measure like this?

Mr. Speaker, I will answer the second question first. For municipalities, in terms of the pace of these projects, the acceleration of us being able to deliver, repair, maintain would end up being a very strong positive to municipalities. As a former mayor, councillor and the president of the Association of Municipalities of Ontario, I have been intrinsically involved in infrastructure projects and the design of those programs.

It is very important that Canada not lose its technological advantage in public transportation, which makes us vulnerable to other countries. I think of contracts that are lost within communities. Some of the members here have lost suppliers.

How does it affect municipalities? If we lose a plant of 120 full time workers with skilled trades, we lose the tax benefits, the salaries, the wages, the benefits let alone those other things that happen in terms of the suppliers and the spin-offs.

When a municipality makes the decision to go elsewhere, we lose the public transportation capability, technology, young people studying in universities and colleges, in drafting or engineering and our ability to export to other countries. What may appear on the surface to a municipality to be an immediate slight price advantage, wait until it starts paying for overseas flights to get its inspections and repairs done.

Mr. Speaker, following along the same line of questioning, I may have shared with the hon. member that my riding had a small producer of seats for public transit projects, which closed not too long ago. Therefore, I take great interest in this topic.

Is the member looking to mandate these requirements on projects where the federal government provides funding support through some other infrastructure program? If so, what proportion of Canadian content is he looking to see in these projects?

Mr. Speaker, in direct response to the hon. member for Simcoe North, I have not put percentages in is this because it is a fairly new concept, not only for parliamentarians but also for our public service.

Therefore, I want to ensure that we understand this fully in principle. By the federal government offering billions of dollars to municipalities in infrastructure and other funding, this is meant to generate Canadians tax dollars, multiplying not only within communities but within the nation and building us a strong public transportation infrastructure.

I believe it is a small request to ask of municipalities that if they come to us for federal support, that at the very least we can generate millions and billions more dollars throughout our nation by supporting a public transportation industry. Then we can really say “Canadian made” and feel proud of it.

On November 6, 2007, the Prime Minister launched the $33 billion building Canada infrastructure plan. This plan is the most comprehensive of its kind in Canadian history. It provides stable and predictable funding for the longest period of time ever committed to by any federal government. No other federal government in Canadian history has ever made such a large, long term investment to modernize infrastructure.

I speak to the plan because of its connection to transit and because of the way we seek to manage it in conjunction with provinces and territories.

Through its new plan, the Government of Canada is providing $33 billion over seven years, which includes: $17.6 billion, or over 50% of the plan, in base funding for municipalities until 2014, including a full GST rebate and $11.8 billion through the gas tax fund; $25 million per year over seven years in base funding to provinces and territories, $175 million for each jurisdiction for basic infrastructure needs like bridge safety; $8.8 billion for the new building Canada fund, which will be applied to strategic projects in large urban centres as well as projects in small communities, with particular attention to those smaller than 100,000 people; $2.1 billion for the new gateway and border crossings fund to improve cross-border trade with the United States; $1.25 billion for a new national fund for public-private partnerships; and $1 billion for the Asia-Pacific gateway

These investments are an important contribution and address the infrastructure needs of municipalities, provinces and territories. This funding will be dedicated to things that matter to Canadians, such as clean water, more efficient public transit, safe roads and green energy.

Building Canada will help support a stronger Canadian economy by investing in infrastructure that contributes to increased trade, efficient movement of goods and people and economic growth that creates jobs. This will include projects such as improvements to the core national highway system, short line railways, short sea shipping, regional and local airports, broadband, and convention centres.

A healthy environment is a clear priority for our government. As such, building Canada will also focus on infrastructure investments that contribute to cleaner air, water and land, including public transit, waste water and solid waste management, brownfield remediation and also green energy, as mentioned before.

To promote the development of strong and prosperous communities of all sizes, building Canada will support investments in public infrastructure that improve the health and safety of families and make communities more liveable. For example, projects that would be eligible for funding include safe drinking water, local roads, bridge rehabilitation and sports and culture.

The Government of Canada is responding to its 2006 consultations with the provinces, territories and the municipal sector. We are doing this by providing more long term and predictable infrastructure funding, as well as more streamlined programs.

Overall, our approach highlights the extent of federal involvement and confirms our respect for jurisdiction, as well as our commitment to working collaboratively on the issues raised during our discussions in developing the plan.

Framework agreements under building Canada have been signed with British Columbia, New Brunswick, Newfoundland and Labrador and Nova Scotia. We are working closely with the other provinces to complete framework agreements with them as well.

The member for Thunder Bay—Rainy River has made a motion asking the Government of Canada to implement a policy to mandate Canadian content levels for public transportation projects.

Our government agrees that this motion should be at least debated in order to understand how it can best support Canadian industries, while at the same time respecting other federal government responsibilities and commitments, such as our commitment to get the best value for taxpayer dollars.

The government understands the importance of supporting the Canadian economy. Earlier this month our government introduced Bill C-41 to allow $1 billion in federal funding to begin flowing to struggling communities through the community development trust. This was recently announced by the Prime Minister.

This support will greatly help single industry towns suffering from major downturns, as well as communities facing chronic high unemployment or layoffs across a range of sectors. Our government also understands that the transportation industry is strong in Canada. Generally, our partners in infrastructure projects tend to be other levels of government. At this time municipal, provincial and territorial governments together are responsible for over 90% of infrastructure spending in Canada. Procurement decisions with respect to infrastructure are ultimately the responsibility of these governments.

After all, these are the orders of government that will let the contracts choose the suppliers and ultimately bear the responsibility for completing the project on time, handling any cost overruns that occur and also managing the infrastructure plan long term. We treat these other levels of government as partners, able to make their own decisions in their own best interests.

Our government is prepared to discuss with our partners how to encourage more Canadian content in these investments, but we will not and cannot force or dictate to provinces, territories and our municipal governments how they should do their procurement.

As I have noted earlier, our key concerns should be getting as much value for the infrastructure dollar as possible. This decision is consistent with the requirements under the Federal Accountability Act that stipulates that federal procurement be conducted with a commitment to fairness, openness and transparency.

The federal budget of 2006 indicated that the federal government will manage infrastructure funding in a manner that will maximize taxpayers' value for money. I think this is a very valid principle that frankly defines our government.

For public transportation projects that receive federal funds under the building Canada fund, the federal government will require that limitations on tendering, such as sole source contracts, be omitted from consideration. Our government has a responsibility to ensure that procurement decisions are consistent with Canada's international trade obligations. What impacts Canadian content levels may have on this is a subject that should be fully discussed.

Mandating Canadian content levels, as has been proposed in the member's motion, would not necessarily get the best value for taxpayers' dollars. By using incentives to encourage people to buy Canadian, there could be some effects we need to fully understand. These could include increased project costs, as the number of potential suppliers diminish; limiting the choice with respect to rolling stock available for infrastructure projects, which is of particular concern to transit projects; and also limitations on available technology.

Additionally, based on federal experience in dealing with municipalities through several generations of infrastructure programming, we believe that domestic procurement requirements dictated by the federal government with respect to infrastructure provisions would be met with resistance by many of our provincial and municipal partners. Our only requirement is that procurement for projects funded with federal dollars is done in a fair, open, transparent and competitive manner.

Let me restate that our government, through its infrastructure program, is investing heavily in a modern economy and economic growth. Canadian workers, engineers, suppliers and manufacturers will all benefit from these investments. We hope that a fulsome discussion will bring about clear solutions in order to support Canadian industries, while also being mindful of the need to obtain the best value for our taxpayers' dollars.

With the building Canada fund, our government is taking steps to address the infrastructure challenge and ensure that our cities and communities are prepared for current and future growth, and can compete internationally.

Modern infrastructure is at the centre of Canada's standard of living and contributes greatly to the quality of life that we value. The building Canada fund is about investing in our country's future. It is about a stronger economy, about a cleaner environment, and about a more prosperous community.

Mr. Speaker, it is a pleasure to speak to this motion put forward by my hon. colleague from Thunder Bay—Rainy River.

Our government spent about $280 billion last year on goods and services. This represents about $1.00 in every $5.00 that we spend in our economy. Given the size of these expenditures and the importance they are to our country, we need to take great care in how this money is spent.

Both the current government and the previous Liberal governments had taken the approach that the lowest price is the law when it comes to procurement in general and, specifically, in transportation, regardless of the impact of how that money is spent on our economy and on our society.

So, what happens? We have situations such as the situation in York region in 2004 where 30 brand new buses were purchased with public funds and not purchased from one of the several Canadian domestic bus manufacturers but, rather, from Belgium. We could say good for the Belgian economy and good for the Belgian bus manufacturer, but very bad for the Canadian economy.

Just last summer, the federal government awarded a military contract for troop buses to a German bus maker over a Winnipeg manufacturer because the German bid came in $2,000 cheaper per bus, which was .5% of the overall price in the $14 million contract. So, a Winnipeg bus manufacturer and all of the jobs that would have resulted from that, plus the taxes that would have been paid by the company and by all of the employees of that plant plus all the ancillary services and support, plus all of the parts that went into those buses, were lost by this federal government.

These are just two examples out of the many instances that we could cite over the last several years of Canadian procurement gone awry.

Other countries, including our major trading partner, stand up for their own economy and their own industries and services. The Europeans, the Japanese and even the Americans, especially the Americans, protect their own domestic market in this fashion.

Of course, one application is the U.S. buy America act which applies to all contracts over $100,000. For vehicles such as rail cars and buses, there is a 60% content requirement and for iron and steel, there is a 100% content requirement. This is perfectly allowable under NAFTA as chapter 10 of NAFTA excludes grant programs, and state and provincial procurement. So it is completely in keeping with our trade commitments.

In fact, the Canadian Manufacturers & Exporters Association went further last week with its report on renewing Canada's infrastructure. CME head Jayson Myers said: “If we continue to be boy scouts to the world, we'll continue to lose investment and lose product mandates elsewhere”.

The CME further said:

By leveraging these investments, governments in Canada would level the playing field to international standards for transportation equipment and infrastructure manufacturers in Canada, reduce business uncertainty by forcing clear, full and open competition for all contracts, and help government effectively address the legal and political controversy surrounding sole-source contracting.

The CME was talking about all infrastructure, not just transportation.

I want to give an example of sole-source contracting. When the leader of the NDP negotiated with a previous Liberal government to take $5.4 billion in corporate tax cuts and insisted that the money be invested for Canadians to meet the goals of Canadians, part of that money was invested in transit across Canada. What that meant in the city of Toronto, for example, was that the city was able to purchase buses, and not just any buses but low-emissions buses, hybrid buses in order to reduce pollution on the streets of Toronto.

They are accessible buses that are easy for people to get on and off. Best of all, those buses were made right in Mississauga, so they were able to ensure local production, ensure jobs in addition to the spin-offs of that plant and all of the taxes and benefits that go with such a procurement.

Canada clearly needs to catch up and follow the lead of our major trading partners. The federal government announced investment in infrastructure and a significant portion of that needs to go to Canadian companies. Our procurement policies need to invest in our products and services and all of the spin-offs that I have described. The requirement to do this simply does not exist in Canada and that needs to change.

When the federal government funds infrastructure, transportation projects, this funding has to ensure a minimum of local benefit. So I would argue that all procurement should meet the test of these Canadian procurement measurements, not only transportation. Now this is done on a case by case basis with relatively low Canadian content levels, but this does little to reduce the uncertainty for manufacturers to sole-source here who do not currently produce in Canada today.

If we leveraged the money that we spend collectively, of all governments throughout the country, for public procurement, we would ensure that not only the manufacturers we have today in Canada but other manufacturers would come to our country, invest here, create jobs, and boost our economy in order to compete for those dollars.

With all of the challenges that are facing our economy today with the high dollar, and a driven high petro dollar because of reckless tax cuts put forward by the current government and previous governments that are in fact helping to fuel a high oil price economy that we are faced with, and other stresses that our economy is facing today, we need to take action.

This government has neglected the manufacturing sector. Defining requirements for public procurement and ensuring domestic sourcing of procurement is one major way to boost our manufacturing sector, boost our economy, reduce unemployment, and maintain and create good, quality jobs in services, but especially in the manufacturing sector.

So, while I do believe that this motion falls short in terms of not requiring specific content levels and while not applying to all procurement, which I believe is appropriate and which other countries do, I certainly believe that this is a positive step.

I see that my time is just about out. I would urge all members of this House to vote in support of this motion and take this as one step along the path to finally catching up with our G-7 partners in ensuring that we are standing up for Canadian production.

Mr. Speaker, in this time of crisis in the manufacturing sector, we are missing once again an opportunity to support our Canadian workers.

I was disappointed, and I am sure members of the House were also, that in relation to our major trading partners, such as China, the United States, the EU and Mexico, Canada stands alone in the absence of a federal policy which ensures Canadian content in transportation projects that are funded through federal taxes.

I was even more surprised to learn that as I speak this is the first time that Canadian content requirements will have ever been debated in the House of Commons.

First, the government should ensure that public funds as a rule are not used to assist the transfer of jobs abroad. That is a first principle. At a time when the manufacturing sector has lost hundreds of thousands of jobs, every job we can keep in Canada counts.

The indirect economic contribution of manufacturing and exporting companies to the Canadian economy is significant. One out of every three jobs in Canada depends on our capacity to export our products abroad. Manufacturing businesses are responsible for two-thirds of goods and services exports and three-quarters of all the private sector research and development done in Canada.

Public investment in transportation equipment and infrastructure in Canada must be used to leverage business opportunities for Canadian industry, create a globally competitive business environment here in Canada, attract foreign investment, and generate the greatest possible economic benefit for Canadians.

Canadian manufacturers are being shut out of our markets by fierce competition and, on top of it, are not able to benefit from transportation projects in the EU, other G-8 nations and China, as these countries have implemented policies that set mandatory domestic content levels to ensure that their tax dollars create domestic growth.

In Canada, when the federal government funds infrastructure or transportation projects with taxpayers' money, the funding is not dependent on conditions that ensure even minimum local economic benefits. Unless the government views infrastructure investments as economic development tools and enacts a clear policy to make sure that Canadian manufacturers benefit economically, our manufacturing sector will not be able to compete.

Unfortunately, a company currently has a better chance of supplying the North American market from the United States rather than from Canada. Because of restrictions based on U.S. content, for example, the buy America act, and the absence of such rules in Canada, Canadian manufacturers in the construction products and public transit equipment manufacturing sector have a vested interest in moving their production activities to the United States.

The federal government announced that it will invest $33 billion in infrastructure over seven years, a significant proportion of which is directed to roads and highways, public transit and bridges. Provinces and municipalities have also announced significant investments in transportation infrastructure and mass transit over the coming decade.

Renewing Canada's infrastructure is a major opportunity to invest in this country's future. It also is a great opportunity to invest in Canadian manufacturing and industry.

Legislation should be in line with what Canada's main economic partners are doing domestically to support their industry, in particular, the United States, Mexico and the European Union. In order, therefore, to enable our transportation industry to be a global leader and a strong competitor in an increasingly tough market, there has to be legislation that mandates Canadian content levels for public transportation projects.

By favouring domestic companies, governments use public funds to stimulate the development of the local manufacturing industry while allowing competition that is based on fair rules for all vendors. What we are asking for here is not protectionism but fair trade.

Let us look at all the restrictions that a Canadian company has to face when trying to sell to a government procurement market in the United States. According to the Canadian Manufacturers and Exporters, if the United States government or one of its agencies awards a contract, Canadian companies can bid as equal partners only if the value of the contract being awarded is greater than approximately $8,000. This exemption was negotiated by the United States through NAFTA, and these contracts are exempt from NAFTA's chapter 10 and do not guarantee equal access to Canadian companies.

Other buy American provisions can also apply if the project concerns a public transit system, an airport, a road, a bridge, a ferry or other types of transportation. These contracts always include national preference rules and regulations and require certificates and the fulfillment of other conditions. Finally, under the buy American regime, if the project is funded by a state or local government, then they can impose their own conditions.

On the other hand, U.S. companies that want to sell to the Government of Canada face no such obstacles. Only provinces may impose local content restrictions if they wish to do so. More often than not, however, provinces do not use government procurement to favour Canadian industry or industry from their province.

Canadians expect more from their government when it comes to protecting their jobs and the economic vitality of our country. The policies in place to protect and foster the Canadian transportation industry up to this point are inadequate and outdated. In our increasingly competitive global marketplace, it is crucial that we as lawmakers support the economic development of local industries.

In drafting legislation on Canadian content levels, we must strive to strike the right balance between promoting our manufacturers and respecting international trade obligations. Therefore, I call on my hon. colleagues to support Motion No. 183 for the benefit of all working Canadians and the future vitality and competitiveness of our manufacturing sector.

I would like to congratulate my colleague, the member from Thunder Bay, on his initiative. I have had deputations from the aerospace industry who equally have pointed out this inequity in terms of providing access to our Canadian markets but being shut out of aerospace opportunities that exist in the United States and in other countries.

This legislation is an attempt to find a balance, not to be protective and not to be hiding behind tariff barriers, but to give equity and the competitive ability to Canadian workers and to Canadian technology, which we know is so well placed in terms of it being state of the art.

Given a level playing field internationally, I know that the Canadian worker, the Canadian investor and the Canadian economy can compete and prosper, but this kind of legislation is absolutely needed as it applies to and bridges investments that Canadian taxpayers are making in the transportation sector. I hope this legislation and the proposals being put forward by my colleague will find the acceptance and the support of the members of this House.

Mr. Speaker, thank you for giving me the opportunity to speak to motion M-183, which I will reread:

That, in the opinion of the House, the government should implement a policy, which is consistent with North American Free Trade Agreement and World Trade Organization policies and guidelines, to mandate Canadian content levels for public transportation projects, and to ensure that public funds are used to provide the best value to Canadians by supporting domestic supplier and labour markets.

The Bloc Québécois agrees with the underlying principle of this motion. But it is important that our colleagues in this House understand that purchases of public transportation equipment do not come under federal jurisdiction. There are no purchases of federal public transportation equipment. Public transportation is a provincial responsibility. When this motion is before the committee, we will try to reach an agreement with the sponsor of this motion on wording it so that the principle of the bill and provincial jurisdiction are respected. It is the provinces that purchase equipment through their transit companies, and they have to be able to achieve the objective of the bill.

That objective is to support domestic suppliers, a goal that the Bloc Québécois has always defended. Even though there is a small problem with the motion, we will do everything we can to reach an agreement so that this objective is attained. There are very significant investments in all sorts of areas related to transportation, including public transportation. The government supports many purchases.

I would like to say by the way that it is not just transit-related procurement. In its areas of jurisdiction, the federal government purchases about $40 to $50 billion worth of goods and is not obliged at all under the agreements to have Canadian content. That is just not something that the Government of Canada decided to do. It would be important to us, though, because if half the federal government’s procurement in its areas of jurisdiction had been in Canada, more than 21,000 jobs a year would have been created across the country. Instead, they were created abroad. For example, in the fall of 2003, the Bank of Canada decided to procure its currency paper from a German supplier rather than from Spexel in Beauharnois. Spexel closed its doors in April 2004, throwing 100 people out of work. That was the result of the procurement of non-Canadian content.

In another example, the government withdrew its Canadian-content requirement for army boots this year. That was bad news for Tannerie des Ruisseaux in Saint-Pascal-de-Kamouraska. The change in the attribution rules for this $7 million contract cost 50 jobs. The Bloc Québécois already tabled a bill about this back in November 2005 through my colleague from Rivière-du-Nord. Clearly, we will support this motion.

As for public transit, it is very important, in Quebec to Nova Bus, a company in Saint-Eustache, and Bombardier Transport in La Pocatière, which are in the rail and monorail business, as well as to companies all over Quebec and Canada that supply parts and equipment because a number of trade agreements have been signed. However, foreign countries favour their own companies.

The United States, for example, has passed laws favouring American suppliers. The Buy American Act covers federal government procurement. It asks the government to favour American suppliers if the price differential in comparison with foreign suppliers is less than 6%. The same Buy American Act also covers federal transfers to the states and local governments. It flatly requires that some of the procurement must be American. In the case of rolling stock, 100% of the final assembly must be done in the United States and 60% of the components by cost must be sourced in the United States.

In the case of non-rolling transit equipment, the final assembly must be done in the United States and all the components must be made there.

In short, if companies want to penetrate the U.S. market they must have plants in the United States. This legislation explains why Quebec companies like Bombardier Transport—which manufactures railway cars in La Pocatière and Saint-Bruno—and Multina—which produces interior and exterior finishings for trains and buses in Drummondville—have plants in Plattsburgh, New York. Our corporations are forced, therefore, to have foreign branch plants in order to comply with the Buy American Act. Once again, there is nothing like that here in Canada.

The European Union requires its member states to favour European suppliers. In sectors not covered by trade agreements, the EU asks its members to reject outright bids from outside its borders unless they have 50% European content or the price differential is more than 3%.

The European countries buy locally. Since 2000, 98% of the subway cars ordered in Germany have been built in Germany. All the subway cars ordered by France were made in France, including some made by Bombardier, which has a plant there. All the subway cars ordered in the United Kingdom were made there, including three-quarters of those cars that were made in a Bombardier plant. More than 91% of Belgian subway cars were made in Belgium.

Nearly all other countries do the same. Japan closes its markets to foreign companies; only Kawasaki has access there. Mexico confers a 10% price advantage to local manufacturers. It is not surprising, therefore, that Bombardier has built a plant in Mexico. China demands that 70% of the value of public transit equipment be made in China and foreign-owned companies must sign a technology transfer agreement.

In Canada, obviously, it depends. At the federal level, there is no law that requires the government to favour Canadian suppliers in its purchases. In an effort to overcome that failing, in November 2005, my Bloc Québécois colleague from Rivière-du-Nord introduced Bill C-440. If it had not died on the order paper, it would have required the government, whenever trade agreements permit, to favour Canadian suppliers. It introduced a 7.5% price preference. The federal government would have been obliged to select a domestic supplier if that supplier’s price was not more than 7.5% higher than a foreign competitor. In certain cases, it also provided for the clear exclusion of foreign suppliers. That was Bill C-440, tabled by my colleague from Rivière-du-Nord in 2005.

In terms of the provinces and local governments, once again, it depends. In Quebec, the government already asks local governments and transit commissions to buy Quebec products. Montreal's Agence métropolitaine de transport called for a minimum of 30% local content in its most recent contract for suburban trains and awarded additional points to bidders with a higher local content.

In Ontario, it is a little less systematic and things are done on a case-by-case approach. Most large purchases are made in Canada, including those from the plant in Thunder Bay, in the riding of the sponsor of Motion M-183.

In British Columbia, it varies. In the case of the new line linking the airport in Richmond to downtown Vancouver for the 2010 Olympics, the contract was awarded—following a call for tenders with no requirement for Canadian content—to Rotam, a Korean company. The same conditions apply to the light rail system planned for Vancouver in 2011.

In Alberta, the Calgary and Edmonton commuter train cars will be built in California. The government did not worry about where the trains would be built.

We know that municipalities, provinces and the federal government are investing a lot of money to maintain, improve and replace infrastructure. Given that major infrastructure investments will be made, Motion M-183 must go through, with the sponsor's consent, of course.

I hope that we will come to an agreement on Motion M-183 with a small amendment that takes into account the fact that this matter falls under provincial jurisdiction.

The Bloc Québécois will support it so that the proposed funds, billions of dollars to be invested in the coming years by all levels of government—municipal, provincial and federal—can benefit Canadian and Quebec companies as much as possible. We have to do this because every other country in the world does it. All industrialized countries have this kind of policy.

It is high time we offered some encouragement to our own companies, which create jobs and are having a very hard time in the manufacturing sector these days. It is time we supported them.

That is why, with a few small amendments, we will support Motion M-183.

Mr. Speaker, I realize there are only a couple of minutes left, but I would like to make a few points based on the motion moved by the member for Thunder Bay—Rainy River.

The motion is that the Government of Canada implement a policy to mandate Canadian content levels for public transportation projects and to ensure that public funds are used to support domestic suppliers and labour markets.

As the House is well aware, last November the Government of Canada unveiled the building Canada plan of $33 billion. This plan represents an unprecedented federal contribution to Canada's public infrastructure.

We are taking action by making strategic investments in infrastructure that contribute to a growing economy, a cleaner environment and strong and prosperous communities. We are doing it in partnership with the provinces, territories and municipalities. This is the way Canadians want their governments to work together.

We can all sympathize with the intent of the motion to ensure that Canadian firms and suppliers get access to contracts for transit systems, but Canadian firms and suppliers, especially those in the transportation sector, are among the best in the world.

Considering the size of this investment, it is important now more than ever to ensure that Canadian taxpayers are receiving the full value for their tax dollars. Put simply, competition is the best way to achieve value for their money.

If we as the federal government set parameters about the Canadian content in transportation or any other sector, are we then limiting competition?